Qualifying for R&D tax credit relief

KEY POINTS

• Eligibility for R&D relief is through qualifying activities rather than industries.
• The business must be seeking an advance in science or technology.
• Need to identify qualifying projects and the specific activities that contribute to innovation.
• Work by subcontractors can also be eligible.

The government’s research and development (R&D) tax credit incentive was established to encourage innovation in the UK. This principle remains the basis for the tax credits – but many innovative companies are still not claiming them.

For many people ‘research and development’ conjures associations of labcoats and quantum physics. But innovation need not be game-changing or revolutionary and qualifying R&D can be found more widely in various everyday enterprises.

The government’s aim with the tax incentive is to promote private sector investment in innovation. The governing guidelines are deliberately broad...